Responsible leadership

Even business leaders who are proudly committed to sustainability can unwittingly find themselves making irresponsible decisions. But a new model of inclusive, teams-based leadership can help mitigate against these oversights and improve decision-making by encouraging more methodical processes that listen to all stakeholders and employees.

The latest behavioural psychology brutally exposes how the way our brains work makes it impossible for individuals to make decisions uncorrupted by bias and self-interest. So responsible leaders must become more aware of these flaws in themselves and others if they’re going to properly grapple with the sustainability of their business.

Responsible Leadership first steps

You’ll find the practical tools, resources and rationale for how to do these things below, together with many more research-based ideas and inspiring case studies on this vital component of responsible business.

Research and ideas

Aesthetic diversity

Dr Juliet Kele explains her award-winning research with Professor Catherine Cassell exploring how diversity in the workplace is most commonly conceived as observable, visual aesthetics, with ‘invisible’ traits, such as age, neurodiversity and sexuality, often missing from diversity and inclusion metrics.

Face of the Firm: The impact of employer branding on diversity

Management by diverse and inclusive teams

Businesses should break away from the idea of a leader being some kind of maverick figurehead and appoint managers who are skilled in building teams and designing good choice architecture instead. The added cognitive capacity, diversity and experience a team brings is impossible for any one individual to rival, particularly when channelled effectively towards a shared purpose or challenge.

Which then begs the question: how big should that leadership team be? Should it include all staff, the whole company, investors, suppliers or even wider stakeholders, such as customers and the local community? Surely the bigger the team is, the greater the benefits? While the logistics of such an all-inclusive approach might make it impossible for day-to-day decision-making, many businesses – including cooperatives, mutual organizations and some crowdfunded companies that are owned by their members, customers, employees or investors – are structured in a way that obliges their leadership team to be democratically elected and consult widely on major decisions.

Whatever the type of business, the principle of involving and responding to as wide a range of stakeholders as possible is fundamental to tackling the complexity and scale of the Global Goals. As the UN Global Compact puts it: ‘By bringing in the perspective of diverse stakeholders who have different vantage points and experiences, leaders can substantially improve their coverage of the problem or opportunity space. This reduces risk and opens new opportunities for large-scale impact.’ In other words, business leaders need to work with all their stakeholders if they’re to have any chance of fully understanding and acting effectively on the Global Goals.

The ways of doing this are manifold and far from unusual: from stakeholder steering groups and staff taskforces to more open investor AGMs and community partnerships. But in essence, all of them are a variation of management by team. The aim is just to encourage a greater proliferation and diversity of teams throughout the company. Ultimately, this all leads to a more widely distributed approach to decision-making and leadership, with those teams best suited to lead and advise on an issue given the power and status to do so. This inclusive style of leadership has enormous benefits when it comes to embedding sustainability in a business’s everyday operations, primarily because it seeks to release the full potential of one of the firm’s most powerful resources: its workforce.

Power and decision-making

‘Power tends to corrupt’, starts Lord Acton’s famous quote about absolute power corrupting absolutely. From lying US presidents to adulterous corporate executives, given the roll call of disreputable politicians and CEOs who have made the headlines in recent years, you’d be forgiven for thinking there was something inherently irresponsible about people in a position of power. And you’d be right. Partly, anyway.

In a series of experimental games by psychologists in 2010, they found powerful people cheated almost a fifth more than powerless people, and were more strict about condemning others’ cheating behaviour than their own. As well as this increase in immoral and hypocritical behaviour, the researchers found that by priming their participants with empowering thoughts and emotions, they also became more willing to commit infidelity, break the speed limit, falsify their taxes, keep stolen goods and overclaim on their travel expenses. Other studies have demonstrated how power eliminates people’s inhibition and reduces fear and self-reflection, while also increasing their impulsivity, self-interest and sense of invulnerability, control and distance from others.

But it isn’t just a simple case of power being bad. Social psychologists have also conducted research demonstrating that the way people construe their power affects how they use it. So if leaders see their position as being responsible for others rather than for their own personal attainment, power can have the effect of increasing inclusivity, reducing corruption and discrimination and promoting equality and human rights. So power in the right hands can also be good.

It’s been left to more recent behavioural science to explain this seemingly contradictory response to power, which suggests it is neither intrinsically good nor bad but acts as an amplifier for an individual’s pre-existing attitudes. A growing body of research around this ‘self-validation’ theory has shown it’s the effect power has on increasing people’s confidence that leads them to being more certain about their immediate thoughts and feelings and then acting on them. So power can turn someone into more of a hero or more of a villain depending on their values and emotions – but it definitely can’t turn a villain into a hero, as Dr Grigorios Lamprinakos explains in this blog for the Birmingham Business School.

Process-driven decision-making

Even the most skilled and conscientious business leaders will have blindspots, ironically because their expertise sometimes makes them overconfident and more likely to take risks, which can lead to poor decisions – particularly when taken under stressful conditions. That’s where process-driven decision-making can play such a vital role. Whether it’s a simple checklist, a series of set questions or a more elaborate role-playing exercise, researchers have found that people improve their ability to achieve their goals by creating a set of conditional rules to follow.

One of the clearest illustrations of how valuable well-designed decision architecture can be was the introduction of the World Health Organization’s pre-surgery checklist for operating theatres that staff go through, step by step, before each procedure. The impact was dramatic, with one study showing a 36% drop in major complications and 47% fewer deaths. By following such a process, it activates more purposeful and deliberative System 2 thinking and helps to mitigate against System 1-type biases and presumptions that can lead to mistakes, especially for the overworked surgeon in charge. It also provides an opportunity to introduce counter-arguments and perspectives that can challenge any initial frame.

Responsible AI

One of the most powerful new technologies in business today is artificial intelligence (AI), which is transforming operations across the board. Sales, marketing, finance and supply chains are all employing machine learning and algorithms to automate human tasks, target customers, protect against fraud and anticipate demand – to name just a few of their many applications. And there are benefits for responsible business, too. According to Professor Al Naqvi of the American Institute of Artificial Intelligence, AI could help remove human bias from sustainability decision-making, identify better ways to measure impacts, draw on global and dynamic data to monitor progress, and help integrate the Global Goals into a company’s overall business strategy.

But there are many serious concerns about the consequences and ethics of AI use in business, which range from data misuse and a lack of knowledge or oversight from company leaders, to mass staff redundancies and automating discrimination. Sadly, most of our datasets are outdated, destructive, exploitative and rife with racism, sexism and other unsustainable logics. Setting AI loose on this data will amplify, not mitigate, our destructive capacity. See how the error rates for facial recognition technology are higher for women and people from minority ethnic groups because the algorithms ‘learn’ from analysing millions of faces scraped from the internet, which are predominantly white and male. Business has evolved to destroy well enough without AI; the question is how to use AI to change things when most of our datasets are so biased. Government policy and the law are struggling to understand and keep up with all the implications of this new technology, too, so responsible businesses must look to thought leaders such as the Future of Life Institute for best practice guidance.

The charity’s ‘Asilomar principles’ cover the research-related, ethical and long-term issues of AI in 23 points – all of them relevant to business. They recommend programmers create ‘beneficial intelligence’ that complements human agency and decision-making and not ‘undirected intelligence’ that replaces it. All AI systems and their decisions should therefore be transparent and auditable by a human authority. The guidance also suggests companies that use AI are responsible for ensuring it doesn’t infringe on people’s human rights, personal liberties and data privacy, and that the technology should aim to benefit and empower as many people as possible. Responsible business leaders need to embed such principles in their own firm’s AI practices, regularly reappraising their implementation to make sure they keep ahead of this rapidly evolving technology so it continues to align with their values and purpose.

Much has correctly been made of the dangers of a robot CEO and the dystopian ‘self-driving-autonomous’ business. But the reality is that business leaders already make extensive use of digital technology in decision-making and ignore the dystopian present we have managed to create without AI. David De Cremer, in his 2020 book Leadership by Algorithm: Who Leads and Who Follows in the AI Era?, maps out this conflict and concludes that AI is unlikely to lead businesses, but has far greater potential to administer them while avoiding the System 1 biases of humans if done responsibly. But how it is designed and used by humans is critical to ensure that what AI provides is beneficial intelligence for responsible leaders.


Tools and resources


Algorithmic decision-making

The Global Goals can enable a process-driven way of making decisions about sustainability. Simply working your way, one by one, through all 17 Goals provides a methodical roadmap for examining all aspects of a business’s sustainable impacts, exposing blindspots and testing any presumptions. This process is essential for determining a business’s overall social purpose and providing the framework for any sustainability strategy. By aligning purpose with the Global Goals, business leaders can customize how they navigate and prioritize them, clustering together those identified as being core dependencies, important risks or most desirable to influence. These can then be used as a checklist to assess the sustainability of a specific scenario or a sequence of decisions, by applying a process of ‘if–then’ or algorithmic thinking to each of them. This can be used to triage risks and shape decision-making across the whole business, and is particularly useful when tackling multiple but connected issues, such as adopting a more circular supply chain in the example opposite.

By breaking it down into individual problems in a sequence of proposals, decision-makers will feel less overwhelmed and can strip away unnecessary details to uncover the critical information required. So for every ‘if’ the scenario proposes, the ‘then’ consequences are considered for each of the Global Goals using a traffic light system. The idea is to keep pondering each ‘if’ until alternative proposals are arrived at that ideally turn the whole matrix green, or at least those areas considered priorities for the business.

Algorythmic decision making

It’s important to stress that knowing the true impacts for a particular Global Goal is often difficult to predict with precision and certainty. However, just being cognisant of the positive or negative direction and approximate magnitude of the impact will often be enough. For instance, if you know that airfreighting goods emits between 12.5 and 50 times more greenhouse gases than sea transport, the consequences are clear regardless of the exact number. There’s a growing body of research that can help provide this sort of general indication of impact. It shows that any toxic substances emitted into watercourses will pollute and harm life, plastic waste pollution usually impacts poorer communities, and products prone to forced or child labour strongly correlate with negative impacts across almost all the Global Goals. Knowing precisely which species or community will be damaged is immaterial: we don’t need 100% scientific certainty to know that something is harmful.

Besides, just asking the questions about potential impact on poverty or marine life in this process-driven way prompts awareness of these sustainability issues and highlights what business leaders are ignoring or have no information about and are simply guessing. Then, by acknowledging these blindspots and inviting evidence, business leaders are helping themselves to make better decisions. Moreover, if these Global Goals-based algorithms are co-created and co-administered with businesses and relevant experts – such as the various collaborative initiatives offered by the UN Global Compact, World Benchmarking Alliance, SDG2000, Natural Capital Coalition, Business in the Community and many local green business clubs – then the benefits to sustainable decision-making will be even greater.


Moral dilemma scenarios

As responsible business leaders, there will be many occasions when you’re faced with difficult decisions around sustainability, as the impacts of one choice or seemingly positive course of action may have unintended or unavoidable negative consequences elsewhere in the company or at a later date. How do you go about deciding what is the best thing to do when neither choice is without risk or to the complete satisfaction of everyone involved? These contradictions and potential conflicts are an inherent part of being a responsible business that pursues both purpose and profit, while also encouraging stakeholder scrutiny and collaboration. It’s never easy for any business leader when faced with such ethical dilemmas, let alone a responsible one.

Take a look at some of these moral dilemma scenarios and ask yourself what you would do:

  • Bullying in the workplace dilemma. 
  • On- or off-shoring of manufacturing jobs dilemma. 

Download moral dilemma scenarios

Race at Work Charter

Read and sign up to Business in the Community’s seven-point charter to help improve equality of opportunity in the workplace.

RAW promo

Race at work charter

The surprising truth about what motivates us

Watch this great animation based on Dan Pink’s talk to the RSA about what really motivates us at home and in the workplace.

RSA ANIMATE: Drive: The surprising truth about what motivates us


Responsible leadership case studies

The Employee Owned Trust: Richer Sounds

  • The successful UK retailer became an Employee Owned Trust in 2019 after its founder, Julian Richer, sold 60% of his shares to the trust.
  • It marks the culmination of 40 years of responsible business practice that prioritised the welfare of its staff through paying a real living wage, opposing zero-hours contracts and offering year-round access to company-owned holiday homes.
  • The company is committed to becoming carbon neutral, free from conflict minerals and paying its fair share of tax.
  • Having spearheaded campaigns against zero-hours contracts and aggressive tax avoidance, Julian Richer has now launched the Good Business Charter accreditation scheme to encourage more responsible businesses and signpost customers to them.

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Case study - Richer Sounds shop front

The clothing firm that defies ‘fast fashion’: Trigema

  • Owned and run by CEO Wolfgang Grupp for more than 50 years, the German textile firm prides itself on its strong support for the local community.
  • Unlike the majority of the textile industry, Trigema makes all of its clothes on site and only imports cotton, so it can have full control over every aspect of the manufacturing process.
  • As well as embracing organic cotton and circularity in its products, the company looks after its ‘Trigema Family’ of staff with fair wages, sponsored learning and guaranteed opportunities for their children.
  • Grupp sees sustainability as a logical way of distinguishing his brand from the competition and uses personal responsibility as a key part of his management approach.

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The disruptive co-operative: C’est qui le patron?!

  • Set up in 2019, the co-operative initially aimed to pay more to dairy farmers than big supermarkets and quickly became the forth-biggest milk brand in France.
  • The 7,500 member-owned company takes a customer-led approach, regularly surveying them to match products to their socially responsible values.
  • This collaborative venture reimagines the relationship between production and consumption, inviting consumers to be co-creators of products and supporters of a shared mission.
  • Having expanded into 30 other product lines, including steak and chocolate, the company has inspired and launched similar cooperatives in other countries around the world.

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Cest qui le patron logo

The ocean stewardship initiative targeting systemic change: SeaBOS

  • The Seafood Business for Ocean Stewardship (SeaBOS) initiative was set up in 2016 and coordinated by the Stockholm Resilience Centre at Stockholm University.
  • SeaBOS aims to try and transform global seafood production and make it more sustainable, protecting the long-term health of the oceans.
  • The initiative connects ‘keystone actors’ in the global seafood system such as marine scientists, seafood companies, fisheries and those in aquaculture.
  • These keystone actors work together to tackle problems such as forced labour, marine plastics and overfishing by creating and lobbying for systemic measures like supranational regulation and traceability technologies.
  • It simultaneously seeks to address seven of the Global Goals, including life below water (Global Goal 14), decent work and economic growth (Global Goal 8) and responsible production and consumption (Global Goal 12).

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